(Hesperia)-– At a time when cities throughout the state are in fiscal distress, the City of Hesperia was pleased to receive a favorable “AA-“rating from independent bond-rating agency, Standard & Poor’s (S&P) for the City’s planned sale of approximately $25 million of bonds, allowing the City to finance the purchase of 5,971 acre-feet of water rights at very attractive, low interest rates. With the highest bond rating that a municipality can receive for this type of bond at “AA+”, Hesperia’s positive rating reflects responsible management and conservative financial oversight.
Despite the fact that the City has suffered from plummeting property values and a high unemployment rate, S&P characterized the City’s position as “very strong…attributed to ample reserves prior to the downturn and expenditure reductions.” Standard & Poor’s also described Hesperia as having a strong general fund with good financial management. “During these difficult times, we are extremely proud that the City of Hesperia has been rated so highly by S&P,” said Mayor Russ Blewett. “Hesperia strives to maintain a solid financial infrastructure and this type of investment supports that goal.”
At its November 20, 2012 meeting, the City Council approved the purchase of permanent water rights formerly owned by Rancho Las Flores, located near the rural southern City boundary. At a cost of $30 million, this purchase will be financed with lease revenue bonds with an interest rate not to exceed five percent over the next 30 years. The Water District leases approximately 6,800 acre-feet of water annually from third party sources. Over the past decade, Rancho Las Flores has been the single largest provider of leased water rights to the Hesperia Water District. In addition, this is the largest amount of water rights purchased at one time in the history of the water adjudication. “The purchase of such a large amount of water rights is a unique opportunity for the City,” said City Manager Mike Podegracz. “With the solid bond rating and low interest rates Hesperia is expected to receive, this purchase allows us more control over the price we pay for water, which is a great thing for the community.” For more information, contact the City Manager’s Office at 760.947.1020.